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U.S. long-term mortgage rates plunge

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It was the second straight decline and pushed rates to their lowest since Sept. 23. Adobe Stock

U.S. mortgage rates are back below 3 percent.

The average for a 30-year loan was 2.98 percent, down from 3.09 percent last week, Freddie Mac said in a statement Thursday. It was the second straight decline and pushed rates to their lowest since Sept. 23.

Rates dropped this week along with yields for 10-year Treasuries, which dipped to 1.44 percent on Tuesday.

“Despite the re-acceleration of economic growth, the recent bond rally drove mortgage rates down for the second consecutive week,” said Sam Khater, chief economist at Freddie Mac.

Borrowing costs have been historically low since the pandemic rattled financial markets in 2020, fueling a housing rally that has sent home prices soaring.

Since dropping to 2.88 percent in late September, rates had been ticking up as investors prepared for the Federal Reserve to cut back on bond purchases. The tapering is expected to push up borrowing costs, but in the meantime, current homeowners have another opportunity to save money by refinancing.

“Mortgage rates are still lower than anything we’ve ever seen prior to August of 2020,” said Greg McBride, chief financial analyst at Bankrate.com. “With inflation at a 31-year high, there are millions of homeowners that can still refinance their mortgages and free up $150 to $200 per month to absorb the higher costs seen in other areas.”

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